Chapter 4

THE ESTIMATE

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 Outline
• Organization

• Planning the Estimate

• Notebook

• To Bid or Not to Bid

• The Estimate

• Site Investigation

• Specialty Contractors

• Materials

• Workup Sheets

• Summary Sheet
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 Organization

 The estimator must maintain a high degree of organization throughout the estimate
development stage. A well-organized estimate improves the probability of getting
the work, facilitating the actual work in the field, and completing the work within
budget.

 Using appropriate software can be an effective way to keep organized.

 The estimate information should include quantities, material prices, labor

conditions, costs, weather conditions, job conditions, delays, plant costs, overhead
costs, and salaries of forepersons and superintendents.

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 Organization

 The estimating costs are often stored in spreadsheets, databases, or estimating

software packages.

 The estimate of the project being bid must be systematically done, neat, clear, and
easy to follow. The estimator’s work must be kept organized to the extent that in an
unforeseen circumstance (such as illness or accident), someone else might step in,
complete the estimate, and submit a proposal on the project.

 All data generated during the development of the estimate must be filed in an
orderly manner.

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 Planning the Estimate

 The need for organization during the estimating process is critical. There are many
decisions that need to be made concerning the logistics of who will do which
portion and when.

 One of the first things that needs to be done when preparing the estimate is to bring
together all the estimate team members to develop the overall estimate schedule.

 Since the preparation of an estimate is a corroborative effort, it is essential that all

persons have input into when certain items are required and that they understand the
interrelationships between the responsible parties.

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 Planning the Estimate

FIGURE 4.1. The Estimate Process.

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 Planning the Estimate

FIGURE 4.1 CONT. The

Estimate Process.

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 Planning the Estimate

FIGURE
4.2.
Sample
Estimate
Schedule

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 Notebook

 A notebook should be kept for each estimate prepared. The notebook should be
broken down into several areas:

• the workup sheets,

• summary sheets,

• errors and omissions sheets,

• proposals received from subcontractors,

• proposals received from material suppliers and manufacturers’ representatives,

• and notes pertaining to the project.

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 Notebook

 Also, a listing of all calls made to the architect/engineer should be kept together,
specifying who called, who was contacted at the architect/engineer’s office, the date
of the call, and what was discussed.

 Every page of the estimate should be numbered and initialed by the person who
prepared that portion of the estimate. In addition, every page of the estimate should
be checked and verified, and that person’s initials should be placed on the page.

 When construction begins and the estimate is used to purchase materials, if there are
questions concerning a specific item, the estimator can be found and asked to clarify
any questions

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 To Bid Or Not To Bid

 It is impossible for a contractor to submit a proposal for every project that goes out
to bid. Through personal contact and the reporting services, the contractor finds out
what projects are out for bid and then must decide on which projects to submit a
proposal.

 Many factors must be considered:

• The type of construction involved compared with the type of construction the
contractor is usually involved in,

• The location of the project,

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 To Bid Or Not To Bid

• The size of the project in terms of total cost and in relation to bonding capacity,

• The architect/ engineer,

• The amount of work currently under construction,

• The equipment available,

• And whether qualified personnel are available to run the project.

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 THE ESTIMATE

 Once the contractor has decided to bid on a particular project, arrangements need to be
made to pick up the contract documents.

 The estimator should proceed with the estimate in a manner that will achieve the greatest
accuracy and completeness possible. The accuracy required must be in the range of 98 to
99 percent for all major items on the estimate.

 Listed in the next slides are the steps in working up a detailed estimate. These steps
should form a basis for estimating:

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 THE ESTIMATE

• Carefully check the drawings and the project manual to be sure that you have everything,
including all addenda. Not all architectural and engineering offices number their drawings in
the same manner, so sometimes there can be confusion as to whether you have all the
drawings.

• Architectural drawings are usually prefixed with the letter A, Structural drawings may be
prefixed with the letter S, or they may be included with the architectural drawings.
Mechanical drawings may be prefixed with M, P, or HVAC. Electrical drawings typically use
the designation E.

• Some jobs have no prefixes before the numbers, but in these circumstances the pages are
typically labeled Sheet 1 of 25. Typically, the front of the project manual or the drawings
contains a list of all the drawings included in the set.

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 The Estimate

• Check all sources to ensure that you have received all of the drawings. If there are
any discrepancies, check with the architect/engineer and complete your set.

• Scan the drawings to get a feel for the project. How large is it? What shape is it?
What are the principal materials? Pay particular attention to the elevations. At this
step, it is important that the estimator understands the project. Make a mental note of
exterior finish materials, the amount of glass required, and any unusual features

• Review the floor plans, again getting the “feel” of the project. The estimator should
begin to note all unusual plan features of the building. Look it over; follow through
the rooms, starting at the front entrance.
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 The Estimate

• Begin to examine the wall sections for a general consideration of materials, assemblies, and
makeup of the building. Take special note of any unfamiliar details and assemblies; circle
them lightly with a red pencil or a highlighter so that you can refer to them readily.

• Review the structural drawings. Note what types of structural systems are being used and
what types of construction equipment will be required. Once again, if the structural system
is unusual, the estimator should make a mental note to spend extra time on this area.

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 The Estimate

• Review the mechanical drawings, paying particular attention to how they will affect the
general construction, underground work requirements, outlet requirements, chases in walls,
and other items of this sort. Even under separate contracts, the mechanical portions must be
checked.

• The submitted bid is based on the drawings and the project manual. You are responsible for
everything contained in the project manual as well as what is covered on the drawings. Read
and study the project manual thoroughly and review it when necessary. Take notes on all
unusual items contained in the project manual

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 The Estimate

• Visit the site after making a preliminary examination of the drawings and the project manual.
The visit should be made by the estimator or by other experienced persons, including
members of the proposed project execution team. By including these persons on the site
visit, expertise and estimate ownership will be enhanced.

• The information that is obtained from the site visit will influence the bidding of the project.
It is a good idea to take pictures of the site to reference when preparing the bid.

• Check carefully through the general conditions and supplementary general conditions,
making a list of all items contained in the project manual that will affect the cost of the
project.

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 The Estimate

• Even though estimators must rely on their own experience in construction, it is imperative that
they create and maintain a close liaison with the other office personnel and field superintendents.

• After you have become familiar with the drawings and the project manual, call a meeting with the
people who would most likely hold the key supervisory positions if you are the successful bidder.

• Be sure to allow these people time before the meeting to become familiar with the project. During
this meeting, the project should be discussed in terms of the construction methods that could be
followed, the most desirable equipment to use, the time schedules to be followed, and the
personnel needed on the project.

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 The Estimate

• Send a copy of all insurance requirements for the project to your insurance company and all
bonding requirements for the project to your bonding company.

• The estimator may now begin the takeoff of the quantities required. Each item must be
accounted for, and the estimate itself must be as thorough and complete as possible. The items
should be listed in the same manner and with the same units of measure in which the work will
be con- structed on the job.

• Whenever possible, the estimate should follow the general setup of the specifications. This work
is done on a workup sheet. As each item is estimated, the type of equipment to be used for each
phase should be listed. The list will vary depending on the equipment owned and what is
available for rent. Prices on equipment to be purchased or rented must be included.
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 The Estimate

• At the time the estimator is preparing the quantity takeoff on workup sheets, the
following tasks can also be ongoing:

o Notify subcontractors, material suppliers, and manufacturers’ representatives that the company is
preparing a proposal for the project and ask them if they intend to submit bids on the project.

o Begin to make a list of all items of overhead that must be included in the project. This will speed
up the future pricing of these items.

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 The Estimate

• The information on the workup is carried over to the summary sheet. Work carefully;
double-check all figures. If possible, have someone go over the figures with you. The
most common error is the misplaced decimal point. Other common errors include the
following:

o Errors in addition, subtraction, multiplication, and division

o Omission of items such as materials, labor, equipment, or overhead.

o Errors in estimating the length of time required to complete the project

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 The Estimate

o Errors in estimating construction waste.

o Errors in estimating quantities of materials.

o Errors in transferring numbers from one sheet to another.

o Adding a line to a spreadsheet and not checking to make sure that the new line is included in the
total.

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 The Estimate

o Errors in setting up formulas, items, assemblies, markups, and so forth in estimating software.

o Using typical productivity rates and costs from estimating software without adjusting them for
individual project conditions.

o Improper use of estimating software because the user does not understand the limits of the
software, or the inputs required by the software

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 The Estimate

 Having priced everything, make one last call to the architect/engineer’s office to check
the number of addenda issued to be sure that you have received them all.

 Double-check the time, date, and place that bids are being received.

 Double-check that all of the requirements for the submission of the proposal have been
followed; be sure the proposal is complete.

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 Site Investigation

 It is often required by the contract documents that the contractor visit the site and attend
a pre-bid conference.

 The importance of the visit and the items to be checked vary depending on the type of the
project and its location.

 As a contractor expands to relatively new and unfamiliar areas, the importance of the
preliminary site investigation increases, as does the list of items that must be checked.

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 Site Investigation

 Examples of the type of information that should be collected are as follows:

o Site access

o Availability of utilities (electric, water, telephone)

o Site drainage

o Transportation facilities

o Any required protection or underpinning of adjacent property

o A rough layout of the site locating the proposed storage trailer and equipment locations

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 Site Investigation

o Subsurface soil conditions (bring a post hole digger to check this)

o Local ordinances and regulations, and note any special requirements (permits, licenses,
barricades, fences)

o The local labor situation and local union rules

o Availability of construction equipment rentals, the type and conditions of what is available as well
as the cost

o Prices and delivery information from local material suppliers (request proposals for the project)

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 Site Investigation

o The availability of local subcontractors (note their names, addresses, and what type of
work they usually handle)

o The conditions of the roads leading to the project, low bridges, and load limits on roads
or bridges

o Housing and feeding facilities if workers must be imported

o Banking facilities

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 Specialty Contractors

 A specialty contractor or subcontractor is a separate contractor hired by the prime contractor

to perform certain portions of the work. The amount of work that the prime contractor will
subcontract varies from project to project.

 There are advantages and disadvantages to using specialty contractors. Trades such as
plumbing, electrical, and heating and air-conditioning have a tradition of being performed
by specialty contractors, due to their specialized nature and licensing requirements

 The use of specialty contractors has gained popularity as a means to reduce risk and
overhead; however, the contractor gives up a substantial amount of control when
subcontracting the entire project.

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 Specialty Contractors

 If specialty contractors are to be used, the contractor must be certain to notify them early in
the bidding period so that they have time to prepare a complete, accurate proposal.

 The use of specialty contractors can be economical but estimates still must be done for each
portion of work.

 Even if the estimator intends to subcontract the work, an estimate of the work should be
prepared. It is possible that the estimator will not receive proposals for a project before the
bid date and will have to use an estimated cost of the work in totaling the proposal.

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 Specialty Contractors

 All subcontractors’ proposals are compared with the estimator’s price (Figure 4.3) .
FIGURE
4.3.
Subcontracto
r’s Proposal.

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 Specialty Contractors

 The specialty contractor’s proposal is often phoned, faxed, or e-mailed into the general
contractor’s office at the last minute because of the subcontractor’s fear that the contractor
will tell other subcontractors the proposal price and encourage lower bids.

 This practice is commonly referred to as bid peddling or bid shopping and is highly
unethical and should be discouraged. To prevent bid shopping, specialty contractors submit
their final price only minutes before the bids close, which leads to confusion and makes it
difficult for the estimator to analyze all bids carefully.

 This confusion is compounded by specialty contractors who submit unsolicited bids. These
bids come from specialty contractors who were not contacted or invited to submit a bid, but
who find out which contractors are bidding the project and submit a bid

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 Specialty Contractors

 A tricky task for the prime contractor is the comparison of the individual subcontractor’s
price quotes. Throughout the estimating process, the prime contractor should be
communicating with the specific subcontractors concerning the fact that they will submit a
price quote and what scope of work is to be included within that quote.

 However, subcontractors will include items that they were not asked to bid and will exclude
items that they were asked to bid.

 A “bid tabulation” or “bid tab” is used to equalize the scope between subcontractors so that
the most advantageous sub- contractor’s bid can be included in the prime contractor’s bid.
Figure 4.4(next slide) is an example of a bid tabulation form

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 Specialty Contractors

FIGU
RE
4.4.
Subco
ntract
Bid
Tabula
tion

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 Materials

 For each project being bid, the contractor will request quotations from materials suppliers
and manufacturers’ representatives for all materials required.

 Although on occasion a manufacturer’s price list may be used, it is more desirable to obtain
written quotations that spell out the exact terms of the freight, taxes, time required for
delivery, materials included in the price, and the terms of payment.

 The written proposals should be checked against the specifications to make certain that the
specified material was bid.

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 Materials

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 Workup Sheets

 The workup sheet can be a variety of forms contingent upon what is being quantified. The
workup sheet is used to make calculations and sketches and to generally “work up” the cost
of each item.

 Material and labor costs should always be estimated separately. Labor costs vary more than
material costs, and the labor costs will vary in different stages of the project.

 For example, a concrete block will cost less for its first 3 feet than for the balance of its
height and the labor cost goes up as the scaffold goes up, yet material costs remain the
same.

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 Workup Sheets

 When beginning the estimate on workup sheets, the estimator must be certain to list the
project name and location, the date that the sheet was worked on, and the estimator’s name.
All sheets must be numbered consecutively, and when completed, the total number of sheets
is noted on each sheet (e.g., if the total number was 56, sheets would be marked “1 of 56”
through “56 of 56”).

 The estimator must account for every sheet, because if one is lost, chances are that the costs
on that sheet will never be included in the bid price.

 If a spreadsheet program is being used, contractors must be very careful to verify that all
formulas are correct and that the page totals are correct.

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 Workup Sheets

 When taking off the quantities, contractors must make a point to break down each item into
different sizes, types, and materials, which involves checking the specifications for each
item they are listing.

 For example, in listing concrete blocks, they must consider the different sizes required, the
bond pat- tern, the color of the unit, and the color of the mortar joint. If any of these items
varies, it should be listed separately.

 It is important that the takeoff be complete in all details

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 Workup Sheets

FIGURE
4.6.
Estimate
Workup
Sheet—

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 Summary Sheet

 All costs contained on the workup sheets are condensed, totaled, and included on the
summary sheet. All items of labor, equipment, material, plant, overhead, and profit must
likewise be included.

 The workup sheets are often summarized into summary sheets that cover a particular
portion of the project

 The summary sheet should list all the information required, but none of the calculations and
sketches that were used on the workup sheets. It should list only the essentials, yet still
provide enough information for the person pricing the job not to have to continually look up
required sizes, thicknesses, strengths, and similar types of information.

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 Summary Sheet

FIGUR
E 4.7.
Estimate
Summar
y Sheet

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 Summary Sheet

FIGURE
4.8.
Overall
Estimate
Summary
Sheet.

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 Summary Sheet

FIGURE 4.8
CONT.
Overall
Estimate
Summary
Sheet.

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 Errors And Omissions

 No matter how much care is taken in the preparation of the contract documents, it is
inevitable that certain errors will occur.

 The same note-taking procedure is used for all other discrepancies, errors, and
omissions(Section 3–12).

 The instructions to bidders or supplementary general conditions ordinarily states that if

there are discrepancies, the specifications take precedence over drawings and dimensioned
figures, and detailed drawings take precedence over scaled measurements from drawings.

 All important discrepancies (those that affect the estimate) should be checked with the
architect/engineer’s office

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 Web Resources

 www.construction.com

 www.e-builder.net

 www.fwdodge.com

 www.rsmeans.com

 www.dcd.com

 www.costbook.com

 www.frankrwalker.com

 www.bidshop.org
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